What it means for stablecoins

The guide and the establishment of national innovation for the American stable law (Genius Act) made a major step towards the law after adopting the Senate banking committee during a Bipartite 18-6 vote. Sponsored by Senator Bill Hagerty (R-Tenn.), The bill establishes a complete regulatory framework for payment stables, marking a significant change in American cryptocurrency policy. The advancement of the bill reflects an increasing dynamic for the regulation of stablescoin, but also intensified divisions within the financial industry and the political establishment.

Bipartisan pushes for more clarity in the regulation of stablescoin

Presented on February 4, 2025, the Act on Engineering aims to provide a regulatory clarity expected for a long time for transmitters and investors of Stablecoin. Stablecoins, cryptocurrency tokens set for the value of a fiduciary currency like the US dollar, are already widely used in the cryptographic economy and traditional financial markets. Despite their growing adoption, the stablecoins worked in a troubled regulatory environment, leading to uncertainty for businesses and consumers.

Senator Hagerty highlighted the importance of regulatory clarity in his opening remarks during the increase in the Senate Banking Committee:

While the world modernizes its payment systems, the United States cannot be left behind, “said Hagerty. “Stablecoins can play a central role in stimulating this modernization. Whether it is to improve the efficiency of transactions, release the working capital or stimulate American cash demand, the advantages of a clear regulatory framework for Stablecoins are immense. »»

The Act on Engineering establishes license and regulatory requirements for stablecoin issuers at the federal and state levels. It makes it possible to monitor the state of stable transmitters with a market capitalization of less than $ 10 billion, while larger issuers will be regulated by the Federal Reserve and the Currency Controller (OCS).

Key provisions of the Act on Engineering:

1. License and surveillance:

• Stablecoin issuers with market capitalization of less than $ 10 billion will be regulated at the state level.
• Emitters exceeding $ 10 billion will face direct monitoring of the Federal Reserve and OCC.

2. Transparency and reserve standards:

• Emitters must provide monthly liquidity reports.
• Complete transparency on the composition of reserves is necessary to maintain confidence and stability.
• Stablecoins must be supported by reserves held in US dollars or highly liquid assets on a 1: 1 basis.

3. Redemption and consumer protection:

• Emitters must respond quickly to buy -back requests.
• The Federal Reserve and the WOT have the power to suspend licenses or impose sanctions for non-compliance.

4. AML / KYC compliance:

• Emitters must comply with anti-flow (AML) and client-client (KYC) standards to avoid misuse of illicit activities.

Committee composition and monitoring

The senatorial banking committee, officially known as the banking, housing and urban affairs committee, is responsible for the supervision of federal monetary policy, financial institutions and international economic policy. His jurisdiction includes banks, deputy insurance, the federal reserve, housing and export controls.

The current composition of the Committee includes 13 Republicans and 10 Democrats.

The bipartite adoption of the engineering law reflects a rare political consensus on cryptographic legislation, in particular in the current hyper-partisan political climate. In particular, five Democratic Senators-Rochester (D-Del.), Alsobrooks (D-MD.), Kim (Dn.J.), Gallego (D-Ariz.), And Warner (D-VA.)-Joined the 13 Republicans to support the bill. This year, the Committee also plans to treat digital asset market executives.

Backing and political alignments of the industry

The bipartite nature of the bill reflects large support among the participants and decision -makers of the industry. The director of Circle’s strategy, Dante Départe, praised the adoption of the bill as “historical and bipartite progress on the creation of a framework of principle, first in America, to regulate the stables of payment”, and explain more than “the law on engineering provides a way in the United States to lead rather than being directed”. Circle is the transmitter of the Stablecoin USDC.

Consumer defender of concerns and problems of conflict of interest

Despite the enthusiasm of the industry, consumer protection groups have made alarms concerning the potential of the engineering law to legitimize risky cryptography regimes. Public Citizen, an eminent consumer defense group, warned that the bill could destabilize the financial markets and erode consumer protections.

In a letter to the committee, Bartlett Naylor, defender of the financial policy of the public citizen, warned:

If the law on engineering becomes the law, the manipulations of the prices, the failures of the coins and the use of cryptocurrencies in illegal finance will increase. The committee should reject this poorly conceived, incomplete and threatening legislation.

Naylor warned that the fact that the bill does not extend the restrictions of the Banking Portfolio Company to Stablecoin issuers will open the door to large technological companies like Amazon, Walmart and Meta to enter the banking sector without sufficient backups:

“The Act on Engineering invites large commercial companies such as Amazon, Walmart, Twitter / X and / or Facebook / Meta to enter the banking sector, because there is a lack of provisions under the Bank Holding Company Act which would prohibit non -financial companies from embarking on banking activities.”

Adding to the controversy, reports have surfaced that the Trump family was in talks to buy a participation in Binance US, the largest crypto exchange in the world, despite its history of legal problems. The founder of Binance, Changpeng Zhao (CZ), recently served a four -month prison sentence to facilitate money laundering. Although Zhao denied reports, the potential binance agreement has raised important ethical concerns.

To complicate the questions, Trump’s trade secretary, Howard Lunick (CEO of Cantor Fitzgerald), has deep links with Tether, the largest stabing issuer in the world. The Lutnick firm is the main banker of Tether and has billions of American cash titles as a reserves for Tether. Although his in -depth knowledge and experience in the cryptographic industry are undisputed, his equally deep ties to the attachment raise real concerns concerning conflicts of potential or real interests, in particular the essential role of Tether in the decentralized financial ecosystem.

However, Stablecoin’s legislation would likely require the attachment to comply with the transparent reserve requirements in order to compete in the United States with Circle stables like the USDC du Circle.

Bicameral alignment?

In the House of Representatives, Stablecoin’s competing bills reflect divergent regulatory approaches, but the representative French Hill (R-Ark.) Introduced a discussion project which closely reflects the Hagety engineering law. Hill, who chairs the chamber’s financial services subcommittee on digital assets, defended a framework that establishes a balance between federal surveillance and the state for stablecoin issuers. Under Hill’s invoice, small stable transmitters with a market capitalization of less than $ 10 billion would be regulated at the state level, while larger issuers would fall under direct supervision of the Federal Reserve and the WC. This state-of-state split reflects a pragmatic approach designed to maintain market flexibility while ensuring sufficient regulatory monitoring at the federal level.

Hill’s bill requires that Stablecoin issuers keep 1: 1 reservations in US dollars or highly liquid assets, ensuring that each digital dollar is fully supported and exchangeable on demand. By reflecting the key elements of the law on engineering, Hill’s proposal aims to create a unified federal framework which gives regulatory clarity for the Stablescoin market without stifling innovation. Hill stressed that bipartite cooperation will be essential to develop an efficient and “adjusted” regulation which promotes consumer protection while promoting the growth of the national digital asset industry.

Unlike the Hill market-oriented approach, the Maxine Waters representative (D-Calif.) Introduced a more centralized and rich bill in application. Waters’ proposal would require all Stablecoin issuers – without any size – to be regulated at the federal level, eliminating the state monitoring option. His bill explicitly prohibits the “major technologies”, such as Meta, Amazon and X, of the issue of Stablecoins, citing concerns concerning the concentration of companies and systemic risk. It also tightens the regulatory controls of offshore companies to prevent them from escaping American financial regulations. In addition, the bill introduces strict eligibility conditions for the ownership of stablecoin issuers, with the exception of people with previous convictions for financial crimes, including fraud and money laundering, to hold more than 5% of a Stablecoin company.

Waters has designed its invoice as a necessary consumer protection measure designed to prevent the type of market instability and fraud that tormented the cryptography industry in the past. While Hill’s bill emphasizes innovation and flexibility of the market, Waters’ bill focuses on regulatory rigor and systemic risk management.

Hill’s alignment on the law on engineering seems to reflect a strategic effort to harmonize the proposals of the Chamber and the Senate, increasing the chances of obtaining a bipartite agreement on the regulation of Stablescoin. Hill and Hagerty presented their bills as essential to the maintenance of American leadership in the space of digital assets and the fight against the growing influence of the digital yuan of China and the complete framework of the cryptocurrency of the European Union. The alignment between Hill and Hagety’s approaches signals the alignment with Trump’s promise to position the United States as a world leader in innovation and stablescoin regulations.

Political path and political issues

The adoption of the law on engineering within the Senate banking committee marks a pivotal moment in the policy of American crypto, but its way to the uncertain law. The bill will require at least 60 votes to advance in the Senate, which makes bipartite cooperation essential.